A flexible budget variance is $1,500 favorable for unit-related costs.This indicates that:
A)actual costs were $1,500 more than the master budget.
B)actual costs were $1,500 less than standard for the achieved level of activity.
C)the sum of the planning and efficiency variances totals $1,500.
D)actual costs were $1,500 less than for the planned level of activity.

Question

Quizplus · Accepted Answer

A flexible budget variance being $1,500 favorable for unit-related costs means that the actual costs incurred were $1,500 less than what was budgeted (standard) for the actual level of activity achieved. This variance directly reflects the efficiency in managing costs relative to the actual production or service levels.

A Flexible Budget Variance Is $1,500 Favorable for Unit-Related Costs